This information taken from the DEA website, http://www.usdoj.gov/dea/concern/abuse/chap1/control/sched1.htm

Schedule I is where all the really bad drugs go. A number of psychedelics have also made it on to the list. I believe that peyote and MDMA(Ecstasy) are also classified as Schedule I. By current criteria I can't figure out why alcohol and nicotine aren't on here, since they both have a high potential for abuse and don't have any accepted medical uses, and I can't figure out why marijuana is on here, since it does have accepted(well, sort of) medical use in the United States. Obviously this list is horribly biased, like most things in the American political system, and it would probably make sense to have something about addictive potential in the criteria. It would probably make more sense to just get rid of the War on Drugs altogether and try and educate people instead of throwing them in jail.

Update:
I've been informed by thecarp that alcohol does have a valid medical use, as an antidote for polyethylene glycol poisoning.

The U.S. "schedule" drug-classification system derives from the agreements of the U.N. "Single Convention on Narcotic Drugs, 1961", as amended by the "1972 Protocol Amending the Single Convention on Narcotic Drugs, 1961".
I don't have much experience interpreting U.N. resolutions, so I can't say whether the treaty's legalese approximation of spaghetti-code is normal. One thing that's clear is the U.N.'s presumption of authority to classify specific substances. The most recent official classification publication is from March 5, 1990, as determined by the U.N. Commission on Narcotic Drugs1. Here, cannabis appears in both Schedule I and Schedule IV.

A twist developed in 1971 with the U.N. Convention on
Psychotropic Substances. Technically (pharmacologically), a "narcotic" is an opium derivative or synthetic that behaves like an opium derivative. Cannabis is not opiate in nature; it really doesn't belong in the narcotic group any more than, say, caffeine. The Psychotropic convention may be seen as an attempt to reconcile policy with nomenclature. In the schedules of the Psychotropic convention, cannabis and derivatives are Schedule I, except for the synthetic Dronabinol, which is Schedule II2.

The absence of alcohol and tobacco from the Schedules is indeed disturbing; the U.S. Center for Disease Control (CDC) fatality statistics for 1997 (most recent year available) show alcohol induced 19,576 deaths, while "drugs" induced only 15,973 deaths, nationwide3. Clearly, in the U.S. at least, alcohol alone is responsible for more deaths than all other drugs of recreation and abuse.